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46 Spring 2022 RED DIESEL - CHANGES REMAIN BLURRED BUT BUSINESSES NEED TO ENSURE COMPLIANCE For the hire sector, the changes to red diesel remains the most urgent public a airs issue being worked on by HAE EHA. Although the Chancellor announced the changes to entitlement to use red diesel in 2020, the two-year transition has coincided with the pandemic, Brexit and the energy price shocks faced by businesses. It has to be said that the Government has not provided the detail or clarity around how the changes are to be managed, complied with and enforced. HMRC, who are responsible for enforcing the changes, have shared various draft guidance notes, all of which lack the level of granular detail needed by hire businesses. More recently, HMRC agreed to host a HAE online brie ng and Q&A and this did help to clarify some key areas of concern. HAE will maintain ongoing contact with HMRC about the experience of members now that April 1st has passed and the changes to red diesel entitlement have come into e ect. HAE EHA has placed key documents and the FAQ sheet on the website to assist members in navigating the changes. ere are many grey areas and these will be tested by how HMRC will go about enforcing the measures. A ‘pragmatic’ approach is promised but some key messages are: • Make sure your records about fuel supply and use in equipment (all fuels) are up to date and detailed. is is so important for all businesses, particularly those with customers in construction but also agriculture (where red diesel use is still permitted) • Terms and Conditions need to specify who has responsibility ( for compliance and costs) if equipment comes back with incorrect fuel or is seized by HMRC on-site. e HAE EHA model Ts and Cs are being updated • No refuelling of equipment using red diesel. Legacy traces are expected but no fresh red diesel can be added (whichmakes running down existing stocks amajor challenge) • HAE is seeking clarity fromHMRC on the de minimis rule for the purposes of VAT is will be an ongoing issue and members are advised to stay updated with latest HMRC guidance and Excise Note 75 HAE will maintain ongoing contact with HMRC about the experience of members now that April 1s has passed and the changes to red diesel entitlement have come into e ect. PUBLIC AFFAIRS UPDATE View key documents and FAQs at www.hae.org.uk/members/red - diesel-guidance/